The next bitcoin halving or bitcoin halving 2020 is almost here. The event is expected to happen in the Mid-May of 2020 and will probably have a significant influence on the economics of Bitcoin mining and the overall Bitcoin market as well. Continue reading this post to learn everything you should know about the upcoming bitcoin halving – what’s going to happen, what old halvings telling us, and what the expert opinions are on the upcoming bitcoin halving.
2020 Bitcoin Halving
Once every 4 years, the rate at which new bitcoin is generated gets halved. This occurrence is a bitcoin halving. By design, bitcoin’s supply is finite – once twenty-one million are mined and no new bitcoin can be created. This decision is to make sure that bitcoin is “deflationary”, unlike most currency types, avoiding the jeopardy of runaway inflation.
However, a mysterious maker of Bitcoin wanted to ensure that individuals could mine bitcoin for a long period of time; the rate at which this currency is mined is not constant. Instead, the rate of the bitcoin block reward is halved every 210,000 blocks. When this happens, the “block reward” for every verified transaction gets reduced in half.
The block reward is nothing but the bitcoin prize that miners get for validating or “mining” – a block. And a block – one of bitcoin’s several mining terms – is a set to five hundred transactions on the blockchain – the digital ledger technology behind this currency (Bitcoin).
What does the Last Halving say?
As the 2020 bitcoin halving is the third one to occur in the history of bitcoin, and that’s why we can find out what the last halving says.
In the weeks before the last bitcoin halving that happened in June 2016, the market price of the bitcoin surged by almost $100 per BTC, from $576 to $650. There was certain market volatility in the instant aftermath of the bitcoin halving – prices crashed back down to almost $500 by the starting of August (same year), but costs have increased mostly since then.
If the market follows a similar path this time, then prices of bitcoin will probably rise in the weeks leading up to the bitcoin halving. After the event, the market is probably to face some volatility in the instant aftermath, the start to trend upward with time. This variance, if the old trends hold, will surely last for almost 2 months. After this duration of variable pricing, the upward trend in the prices of bitcoin will be weak for numerous months.
What the Experts Believe will happen?
However, experts aren’t 100% certain that the market is going to follow previous trends. Therefore, you shouldn’t anticipate that the market this year acts like it did in 2016. Some experts like CoinShares CSO Meltem Demirors, think that price surge has happened already and the market won’t target much to the bitcoin halving.
One thing is sure that bitcoin halving 2020 is going to have significant and unpredictable impacts on almost every facet of bitcoin.